In order for USD/JPY to extend higher, Japanese investors need to buy foreign bonds. The Ministry of Finance’s weekly report of Japanese investments will be released this evening and the outcome could have a meaningful impact on USD/JPY. Unfortunately it is difficult to handicap and therefore best traded reactively. If Japanese investors buy more than Y100B worth of foreign bonds, USD/JPY can be bought for a move higher. If they sell –Y100B worth of foreign bonds or more, USD/JPY can be sold REACTIVE TRADE

TECHNICALS
95.00 retested
Range continues
Break of 95.00 opens 93.00

USD/JPY continues its range trading path as retests support at 95.00 level but so far the double bottom holds, though a break would open the possibility of decline to 93.00.

Employment numbers are important for every country and Australia is no exception. However this month’s Australian labor market numbers are difficult to handicap because the PMIs show fewer jobs cut in the manufacturing and construction sectors but greater job losses in the service sector. As such this data is best traded reactively. If employment rise by 20K or more, the AUD/USD can be bought for a further recovery. However if employment declines by 20K or more, the AUD/USD can be sold. REACTIVE TRADE

TECHNICALS
9500 gap filled
9600 caps rebound
9300 now near term low

Aussie finally put in a first positive performance in days filling the gap at 9500 but 9600 caps the upside for now. Meanwhile 9300 looks to be the new near term bottom.

3. EUR/CHF – Switzerland Producer Prices

Switzerland’s producer price report is not a big market mover for the Franc unless there is a significant surprise. Therefore this data is best traded reactively. If PPI drops by -0.2% or more, EUR/CHF can be bought for a move higher. If PPI rises by 0.3% or more, EUR/CHF can be sold. REACTIVE TRADE
> PROACTIVE or REACTIVE TRADE

Canadian house prices are scheduled for release on Thursday and the report is not materially market moving for USD/CAD unless there is a big surprise. Therefore like the rest of today’s reports, the data should be traded reactively. If house prices grow by 0% or less, we expect USD/CAD to rally. If house prices grow by 0.4% or more, we expect USD/CAD to slide. REACTIVE TRADE

TECHNICALS
1.0150 support does not budge
1.0250 still topside cap
Vol compresses

USDCAD remains in a downward bias the volatility continues to compress as the pair remains with a very tight 1.0150-1.0250 range with the lower end refusing to give way.

We have strong reasons to believe that U.S. retail sales increased in the month of May. According to reports from the International Council of Shopping Centers and Johnson Redbook, consumer spending accelerated last month, which should be good for the dollar. The data can therefore be traded proactively or reactively. For those who choose to wait, if retail sales rise by 0.1% or less, the EUR/USD can be bought. If retail sales rise by 0.6% or more, the EUR/USD can be sold. PROACTIVE or REACTIVE TRADE